TMI Blog2008 (3) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... rown in his agricultural land sugarcane and converted the same into jaggery. The profit on sale of jaggery was shown as agricultural income exempt from tax. AO relying on the decision of the Hon'ble Allahabad High Court rendered in the case of Seth Banarsi Das Gupta vs. CIT (1977) 106 ITR 804 (All) assessed the declared agricultural income as business income. He also distinguished the ratio laid down in the case of CIT vs. H.G. Date (1971) 82 ITR 71 (Bom) by holding that the assessee failed to justify as to why it was not possible to sell the sugarcane as such because of which the assessee was compelled to convert the same into jaggery. 4. The expression "agricultural income" connotes any income derived from land by agricultural operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed its earlier ruling rendered in the case of CIT vs. H.G. Date. 7. Learned Departmental Representative relied on the decision of the Hon'ble jurisdictional High Court rendered in the case of CIT vs. K.S. Imam Saheb (1969) 71 ITR 742 (Mad). In this case it was held that there should be a nexus between the income and the land and the agricultural operations by which is meant something done to the land by human or mechanical agency to produce out of the land any crop, tree, plantation or other produce or product. The immediate source of the income must be land of the description or character mentioned in the definition. 8. He further relied on the decision of the Hon'ble Allahabad High Court rendered in the case of Seth Banarsi Das G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thick and then it is poured into small to medium size iron or aluminium cans where blocks of jaggery are formed after cooling. Size of the blocks can vary from 1 kg. to 12 kgs. Finally these blocks are packed in gunny bags. From 100 kgs. of sugarcane, 10 kgs. of jaggery is made. 10. Since there exists a cleavage of judicial opinion over the point whether jaggery c0uld be construed to be agricultural income, learned counsel for the assessee relied on the decision of the Hon'ble Supreme Court rendered in the case of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177: (1973) 88 ITR 192 (SC). In this case apex Court has held that if the Court finds that the language of a taxing provision is ambiguous or capable of more meanings than one then t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t marketable or fit for sale, some process may have to be undertaken, the section does not contemplate the sale of an item or a commodity which is different from what is cultivated and processed. The immediate source of income must be land of the description or character mentioned in the definition. There exists no nexus between jaggery and agricultural operations. We find that the nature of the commodity is different after the application of the process. When sugarcane was converted into jaggery it resulted in the production of a different commodity. Conversion of sugarcane into jaggery is not a necessary process performed by the cultivator to render sugarcane fit for being taken to the market. As such profit from the sale of jaggery falls ..... X X X X Extracts X X X X X X X X Extracts X X X X
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